Prime Minister Junichiro Koizumi on Monday defended the government's plan to try to revive insolvent companies that are cut off by their banks amid growing criticism it is attempting to interfere in private sector affairs.
"There are jobs the government must handle when the private sector's function is weak," Koizumi told a House of Representatives panel on issues related to public corporations. "It is necessary for the government to intervene to a certain extent."
Koizumi was referring to the government's plan to set up a new entity to deal with companies whose financing may be cut off in the course of bank-sector reform. The plan is part of an "industry reconstruction" plan contained in the economic package the government released last month to accelerate the disposal of bad loans at banks and combat deflation.